Correlation Between Tiaa-cref Small-cap and Maryland Tax-free
Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Small-cap and Maryland Tax-free at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tiaa-cref Small-cap and Maryland Tax-free into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref Small Cap Blend and Maryland Tax Free Bond, you can compare the effects of market volatilities on Tiaa-cref Small-cap and Maryland Tax-free and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tiaa-cref Small-cap with a short position of Maryland Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Small-cap and Maryland Tax-free.
Diversification Opportunities for Tiaa-cref Small-cap and Maryland Tax-free
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tiaa-cref and Maryland is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Small Cap Blend and Maryland Tax Free Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maryland Tax Free and Tiaa-cref Small-cap is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tiaa Cref Small Cap Blend are associated (or correlated) with Maryland Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maryland Tax Free has no effect on the direction of Tiaa-cref Small-cap i.e., Tiaa-cref Small-cap and Maryland Tax-free go up and down completely randomly.
Pair Corralation between Tiaa-cref Small-cap and Maryland Tax-free
Assuming the 90 days horizon Tiaa Cref Small Cap Blend is expected to generate 5.3 times more return on investment than Maryland Tax-free. However, Tiaa-cref Small-cap is 5.3 times more volatile than Maryland Tax Free Bond. It trades about 0.03 of its potential returns per unit of risk. Maryland Tax Free Bond is currently generating about 0.05 per unit of risk. If you would invest 2,042 in Tiaa Cref Small Cap Blend on October 9, 2024 and sell it today you would earn a total of 382.00 from holding Tiaa Cref Small Cap Blend or generate 18.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Small Cap Blend vs. Maryland Tax Free Bond
Performance |
| Timeline |
| Tiaa-cref Small-cap |
| Maryland Tax Free |
Tiaa-cref Small-cap and Maryland Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa-cref Small-cap and Maryland Tax-free
The main advantage of trading using opposite Tiaa-cref Small-cap and Maryland Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Small-cap position performs unexpectedly, Maryland Tax-free can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Maryland Tax-free will offset losses from the drop in Maryland Tax-free's long position.| Tiaa-cref Small-cap vs. Dws Government Money | Tiaa-cref Small-cap vs. Artisan High Income | Tiaa-cref Small-cap vs. Transamerica Intermediate Muni | Tiaa-cref Small-cap vs. Leader Short Term Bond |
| Maryland Tax-free vs. Qs Large Cap | Maryland Tax-free vs. Commodities Strategy Fund | Maryland Tax-free vs. Nasdaq 100 Profund Nasdaq 100 | Maryland Tax-free vs. Tax Managed Large Cap |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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